00:00Blue Owl is said to have sold its $1.4 billion portfolio of loans.
00:04This says the asset manager attempts to pay out investors in a fund
00:08that was hit with a wave of redemptions last year.
00:11For more, let's bring in Bloomberg's Silas Brown.
00:14So Silas, Blue Owl found some liquidity here.
00:17Is this a good outcome for investors in the fund?
00:20Yeah, I think it's a genuinely nuanced picture.
00:25In one respect, yes.
00:27I mean, the debt that they've managed to raise is at close to par.
00:33So, I mean, in terms of investor distributions, I mean, that's a great result.
00:38But I think also it marks a sort of end to a rather chaotic period for the fund and for
00:46Blue Owl itself.
00:47And so I think the kind of by hook or by crook nature of the distribution is somewhat concerning to
00:54investors.
00:55But I think overall top line figure, reasonably good result for investors.
00:59Well, how has this highlighted the risks confronting retail investors entering what's this fast growing private credit market now worth,
01:07what, $1.8 trillion?
01:08Yeah, I think the theory is quite interesting here.
01:16As is kind of obvious, private credit is an illiquid asset class.
01:20And these vehicles create some degree of liquidity, mostly for retail investors.
01:25But obviously, it's not a great look if you get a big amount of investor withdrawals and you're going to
01:31have to gate.
01:32Not that Blue Owl did, by the way.
01:33But I think the general picture and the kind of the chattering classes in private credit, be they analysts or
01:40journalists, would kind of point to this difficulty for private credit.
01:46If they do see waves of redemption requests and investor withdrawals, are they going to have to gate funds?
01:52You know, how are they going to mediate that liquidity mismatch?
01:55I think that's a challenge for the market going forward.
01:58I think that's a challenge for the market.
Comments